A leading indicator of Chinese economic activity rose marginally in May and at a slower pace than a month earlier, suggesting more sluggish growth for the overall economy in the months ahead.
The Conference Board said Monday that its leading economic indicator (LEI) rose 0.3 percent month-on-month in May, slower than a 1.5 percent increase in April. Only three of the six components contributed positively to the index last month.
"The LEI slowed rapidly in May, suggesting weaker growth ahead," said Andrew Polk, resident economist at the Conference Board China Center in Beijing. "Real estate activity and consumer expectations performed especially poorly, and credit expansion seems to have become less effective at driving future growth," Polk said.
"Strikingly, the growth in the LEI is now below its pace six months ago and the majority of its components have contributed negatively over that period," the economist added.
The coincident economic index, which measures the current economic activity, increased 0.7 percent in May following a 0.4 percent rise in April. All five components contributed positively to the index.
A slew of economic indicators released earlier this month suggested China's economic growth likely slowed further in the second quarter after the first quarter's 7.7 percent expansion. Exports, bank lending, industrial production and fixed asset investment showed weaker growth rates in May while retail sales maintained momentum.
The World Bank this month reduced its 2013 growth forecast for China to 7.7 percent from its January projection of a 8.4 percent expansion. The growth is expected to accelerate to about 8 percent each in 2014 and 2015 as global conditions improve.
Last month, the International Monetary Fund downgraded its 2013 growth estimate for the economy to 7.75 percent and urged the nation to respond to the challenges especially in the area of social financing and reduce high dependence on investment.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.